Holiday 2012 Sales: Gloomy but with Glimmers of Hope

Some of the figures are still being tallied, but 2012 holiday season sales are being called the worst since 2008, the first year of the Great Recession. Holiday-related sales rose only 0.7% from October 28 through December 24, according to the MasterCard Advisors SpendingPulse, compared with a 2% increase last year. Research firm ShopperTrak had expected traffic to climb 3.3% this year, but last month downgraded their projection to 2.5%.

Amid all the gloom, e-commerce provided a bright spot. Year-over-year sales growth for the period from October 29 to December 25 reached 15.2%, according to the Chase Holiday Pulse from Chase Paymentech. Yet even inside this silver lining there lurked a cloud: while the number of transactions increased dramatically (24.3%), the average ticket value of shoppers' digital orders decreased 7.3% year over year.

Why the slowdown in sales? There are numerous suspects, including consumer jitters over the government's inability to reach a fiscal cliff compromise before Baby New Year 2013 made his debut, along with the devastation from Hurricane Sandy in the Northeast.

"Consumers are understandably reticent to spend if they don't know the potential impact on their finances," Chris Donnelly, managing director of Accenture's retail practice, told Forbes.

"Santa's sleigh was light this year, as early results form last-minute Christmas shopping point to soft sales despite unplanned promotions," according to Citi Investment Research analyst Deborah Weinswig, quoted in published reports.

National Retail Federation president Matthew Shay expressed optimism that the numbers would not turn out to be as dire as feared when every penny is counted. Among other positive signs, he cited the impact of additional purchases when consumers use the gift cards they've received. On December 26, Shay was quoted on CNBC saying "We're still pretty optimistic it's going to be a solid year; we're still going to have year-over-year growth of 4.1%." However, even if that projected figure turns out to be correct, it's still less than last year's increase of 5.6%.

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